- The USDA’s June WASDE leans bullish corn, bearish beans, slightly supportive Chicago wheat and less supportive KC.
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US End Stocks |
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—— million bu —— |
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May 2018 |
Jun 2018 |
Jun 2019 |
Jun 2019 |
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Corn Wheat Soybeans |
2,095 995 1,127 |
2,195 1,070 1,102 |
2,485 970 1,141 |
1,675 1,045 1,072 |
- WASDE in this year’s June report was much more aggressive in altering US corn production, and took an axe to both US corn acreage and yield. Planted US corn acres were lowered 3 million. Yield was lowered a massive 10 bushels/acre to 166. Both changes are record large for June. Old crop corn stocks were raised 100 million bu amid reduced exports. New crop US corn stocks were lowered 810 million bu (33%). New crop corn stocks/use at 11.8% pushed up the season average cash price to $3.80, vs. $3.30 previously.
- US soy and wheat balance sheet changes are far less exciting. Old crop soy stocks were raised another 75 million bu to 1,070. New crop soy production was left alone. New crop US soy stocks were lifted to 1,045 million bu, vs. 970 Mil projected in May. The goal of the market is to further shift US farmland away from soy to corn.
- Old crop US wheat stocks were lowered 25 million bu on better than expected physical export shipments in April and May. New crop wheat production was raised 6 million as a boost to HRW yield offset a modest decline in SRW. New crop wheat stocks are pegged at a more than adequate 1,072 million bu. Chicago’s premium to KC has widened to $.58/bu, basis spot, new contract highs.
- Changes to world balance sheets mostly reflected changes in the US. New crop world corn stocks were lowered 24 million mt. Argentine production was raised 1 million mt to a record 50 million. World corn stocks/use less China this month is pegged at 11.6%, the lowest since 2012.
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World End Stocks (million mt) |
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May 2018 |
Jun 2018 |
May 2019 |
Jun 2019 |
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Corn Soybeans Wheat |
325.9 113.2 275.0 |
325.4 112.8 276.6 |
314.7 113.1 293.0 |
290.5 112.7 294.3 |
- New crop global wheat and soy stocks were little changed, but the world wheat balance did include a boost in non-US production worth 3.2 million mt.
- Russian wheat production and exports were raised 1 million mt. Ukrainian wheat production was also raised 1 million mt, with exports raised 0.5 million. The Black Sea’s exportable wheat surplus is pegged at 64 million mt, up 3.3 million on last year and the second largest on record.
- The midday GFS weather forecast is wetter in the Southern and Eastern Midwest in the 6-15-day period. The GFS is probably too wet, but it advertises cumulative totals of 3-5″ across MO, IL, IN, OH and KY June 19-25. Such totals will renew concerns of ponding and elevated waterways. The near-term outlook features a mix of rain and sun through the weekend.
- The corn market’s task without ideal weather is to raise domestic wheat feed use and shift marginal world demand to S America and the Black Sea. Weekly highs should be scored today or Wednesday morning as the USDA was much more aggressive than anticipated. It is all about weather and crop conditions over the next 4-5 weeks.